One of the big questions in urbanism is the degree to which culture shapes economic development. Traditionally, it was thought that culture follows from economic development: The more developed and affluent that a city becomes, the more money that it has to spend creating art galleries, museums, concert halls, and other cultural venues.

But my own writing on the creative class and a large number of other studies argue that culture acts as a key factor in economic development by helping attract talented, ambitious people to cities. Others go further, contending that arts and culture are large industries that act as direct inputs into development.

A new paper takes a deep dive into the connection between culture and economic development in New York and London. The paper, written by a team of scientists from Nokia Bell Labs, Cambridge, and published in the journal Frontiers in Physics, looks at the ways in which culture and cultural capital interact with economic factors (such as changes in median income and house prices)to shape urban economic development. And because urban economic development and culture are increasingly seen to be associated with rising gentrification and deepening inequality, it also looks at the effects of cultural capital on housing prices and housing affordability in these cities.

To do this, the researchers tracked roughly 1.5 million photographic images of the venues and events that comprise the cultural capital of both New York and London. Their study breaks down cultural capital into nine categories: advertising and marketing; architecture; crafts; design (product, graphic, and fashion); film (TV, video, radio, and photography); IT software and computer services; publishing; museums, galleries, and libraries; and music, performing, and visual arts.

The study gauges the effects of these types of cultural capital on both median income, house prices, and composite indexes of urban development in London’s 33 boroughs and 60 of New York’s 71 community districts over the period 2007 to 2014, which spans the Great Recession and its recovery. The overarching takeaway is that culture or cultural capital plays a key role, operating alongside more traditional economic factors, in shaping urban development.

Culture and neighborhood development

The graphs below show the role of cultural capital and economic capital in urban development in London and New York neighborhoods, respectively. The study finds that both these types of capital have a role in urban development and the improvement of neighborhoods. In the graphs below, each dot corresponds to a neighborhood, and its position on the graph is determined by the two values of capital for that specific neighborhood. The size of the dot reflects a positive change in development; larger, darker dots show greater levels of change.

Ranked cultural and economic capital in 2010. The size of each node represents the change in development score (IMD for London and SVI in New York) between 2010 and 2015. The darker and larger a node is, the more improvement it has had over the five-year period. (Hristova, Aiello, Quercia/Frontiers in Physics)

Cultural capital plays a strong role, alongside economic factors, in neighborhoods in the upper right-hand quadrant of these graphs. In London, this quadrant includes the neighborhoods of Kensington and Chelsea, Westminster, and the City of London; in New York, Greenwich Village, Midtown, and Brooklyn Heights. Cultural capital plays an even larger role than economic factors in neighborhoods in the lower right-hand quadrant of the graphs: Camden, Islington, and Hackney in London; the Lower East Side, Bushwick, and East Harlem in New York.

But do certain types of culture and certain forms of cultural capital matter to neighborhood development?

To get at this, the study examines the specific typesof cultural capital that influenced the development of particular neighborhoods. Performance arts are prominent in the central areas of both cities, while architecture is important in both central and peripheral areas. East London tends to specialize in design, while in West London, marketing dominates alongside performing arts.

The cultural specialization of neighborhoods in London (left) and New York (right). (Hristova, Aiello, Quercia/Frontiers in Physics)

The next set of charts tracks the effects of both cultural specialization and cultural diversity on neighborhood development. The color of the dots reflects the corresponding location’s cultural specialization, and the size of the dots reflects the neighborhood’s cultural diversity.

Across both London and New York, higher levels of neighborhood development are associated with cultural diversity as well as cultural capital. The neighborhoods with the highest levels of development tend to specialize in performing arts. In London, higher levels of urban development are also associated with the design and publishing industries.

Culture and housing prices

From Spike Lee’s anti-gentrification rants to David Byrnes’ complaint that New York City has been usurped by the top 1 percent, arts and culture have come to be seen as triggers of gentrification and rising housing prices. The graphs below show the close relationship between cultural capital and housing prices across neighborhoods in New York and London, although cultural capital appears to play an even greater role in London’s housing prices than in New York’s. All of the specific types of cultural capital are associated with housing price increases, though the associations are again closer across the board in London than New York. “[E]ven though several economic and geographical factors impact house prices—such as property type or size,” the authors write, “cultural capital alone holds a considerable explanatory power.”

Linear regression results for housing price z-scores across neighborhoods over the period 2010–2015. The regression line is shown in red and the shaded area around it represents the limits of the 95% confidence interval. (Hristova, Aiello, Quercia/Frontiers in Physics)

Ultimately, the study finds that cultural capital has been a significant factor in the development of urban neighborhoods in the superstar cities of London and New York, both during and after the Great Recession. Culture is not a mere afterthought or an add-on, but a key contributor to urban economic growth. But in fueling neighborhood growth and development, it has also played a role in rising housing prices, contributing to gentrification.

Culture, then, is bound up with the New Urban Crisis—a crisis of development and success—which is making our largest and most dynamic cities more expensive and less affordable, and in doing so, threatens the very economic, racial, and cultural diversity which has fueled their cultural creativity in the first place.

But it’s also important not to throw the proverbial baby out with the bath water. The solution is not less culture or less development, but ensuring that the cultural revitalization and redevelopment of our cities and neighborhoods can be channeled in more inclusive ways that benefit all urbanites.

About the Author

Richard Florida is a co-founder and editor at large of CityLab and a senior editor at The Atlantic. He is a university professor in the University of Toronto’s School of Cities and Rotman School of Management, and a distinguished fellow at New York University’s Schack Institute of Real Estate.

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